Exhibit 10.26
SEPARATION AGREEMENT AND GENERAL RELEASE
----------------------------------------
It is hereby agreed by and between ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ of ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Executive") and ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇., ▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇ company with a corporate office at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇ ▇▇▇ (the "Company"), for good and sufficient consideration as more
fully described below, that:
1. EMPLOYMENT STATUS: Executive's employment with the Company will cease
------------------
on September 28, 2001 (the "Termination Date"). As of the Termination Date,
Executive's salary and benefits (including any eligibility to participate in
Company benefit programs and plans) will cease, and any entitlement Executive
has or might have under a Company-provided benefit plan, program or practice
will terminate on the Termination Date, except as required by federal or state
law, or as otherwise described below.
2. GENERAL BENEFITS: On the Termination Date, Executive will be entitled
----------------
to the following:
(a) All base salary and wages earned through the Termination Date;
(b) A payment for unused, earned vacation time accrued through the
Termination Date, as vacation will cease to accrue as of the
Termination Date notwithstanding any salary continuation pursuant to
Section 3(a) below;
(c) The opportunity to elect to convert the long term disability
coverage (which will terminate on the Termination Date) to an
individual policy, at the Executive's cost and expense;
(d) The opportunity to elect to convert his life insurance policy
coverage (which will terminate on the Termination Date) to an
individual policy, at the Executive's cost and expense.
(e) To exercise any Company stock options which the Executive holds that
are vested, for a period of ninety (90) days following the
Termination Date, notwithstanding anything to the contrary in the
Executive's Stock Option Agreement.
(f) Assume the rights, obligations and liabilities under the car lease
agreement currently in place between the Company and the car lessor,
with respect to the car the Executive is currently contributing
lease payments against.
All amounts set forth in this Section 2 are subject to any applicable
federal, state and local deductions, withholdings, payroll and other taxes.
3. CONSIDERATION: In consideration for Executive's execution of this
--------------
Agreement, including specifically the release provisions in Sections 4, 5, and
6, the Company agrees to the following:
(a) Salary Continuation: The Company agrees to provide the Executive
-------------------
with salary continuation based on the Executive's present annual base salary of
two hundred and thirty thousand dollars (US$230,000) for a period commencing on
the Executive's Termination Date and ending on the earlier of (i) twelve months
from the Termination Date; or (ii) the date on which the Executive commences
other employment (either full or part time and whether for a profit or not-for
profit entity), provides consulting services, starts his own company or
business, or commences self employment activities. Notwithstanding the
foregoing, the Executive shall be entitled to hold one or more Board of
Directors seats and to provide consulting services without triggering the
termination of his salary continuation herein, provided and so long as the
aggregate compensation that the Executive receives from holding such seats and
performing such consulting services does not exceed an annualized run rate of
fifty thousand dollars (US$50,000). It shall be the Executive's obligation to
immediately notify the Company in writing of the date he commences the
activities described in Section 3(a)(ii) herein and in such notification to
provide details of the same including company names and addresses and with
respect to Board of Director seats and consulting services, his compensation,
regardless of whether such activities trigger the termination of his salary
continuation. A failure by the Executive to immediately notify the Company as
required herein shall be considered a breach of the Agreement and be subject to
Section 11 below. The salary continuation shall be paid to Executive in
accordance with the Company's current payroll practices on the first regularly
scheduled payday next following the Termination Date set forth in Section 1
above; and
(b) Health Benefit Continuation: The Company agrees to continue to
---------------------------
provide the Executive's medical, dental and/or vision benefits in effect just
prior to the Termination Date ("Health Benefits") through the salary
continuation period described in Section 3(a) above, at the same level of
contribution from the Executive and the Company, as existed prior to the
Termination Date. At the end of such salary continuation period, the Executive
shall have the opportunity to elect to continue coverage under the Company's
health insurance at the Executive's cost and expense, pursuant to the
Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA"). The last day
of the Executive's salary continuation period described above shall be the date
of the "qualifying event" under COBRA. The Company agrees to provide the
Executive COBRA information, at the appropriate time, under separate cover.
(c) 401(k) Contribution: The Executive's 401(k) contribution will
--------------------
continue, at the Executive's current participation levels, if any, through the
Executive's salary continuation period, if the Executive elects to do so. If
applicable, loan deductions will also continue. The Executive understands that
it is his responsibility to contact CIGNA directly at ▇▇▇-▇▇▇-▇▇▇▇ to discuss
distribution and loan payback options.
(d) Financial and Tax Advise Reimbursement: The Executive shall be
---------------------------------------
entitled to reimbursement from the Company of up to five thousand dollars
(US$5,000) for any financial and/or tax advise sought by and provided to the
Executive provided such advise was provided
2
prior to his Termination Date and the Executive provides supporting
documentation, acceptable to the Company, of the advise provided and the charges
incurred.
(e) Executive Search Fees: At the request of the Executive, the
---------------------
Company agrees to pay up to fifteen thousand dollars (US$15,000) directly to an
Executive Search Firm, which the Executive has retained to assist the Executive
in finding new employment. All such charges must be incurred during the salary
continuation period described above and shall be billed by the Executive Search
Firm directly to the Company, attn: V.P. of Human Resources.
(f) All payments set forth in this Section will be subject to any
applicable federal, state and/or local deductions, withholdings, payroll and
other taxes.
4. SETTLEMENT OF AMOUNTS DUE: The amounts set forth above in Sections 2
--------------------------
and 3 shall be complete and unconditional payment, settlement, accord and/or
satisfaction with respect to all obligations and liabilities of the Company, its
partners, officers, directors, trustees, executives, representatives and/or
agents to Executive, and with respect to all claims, causes of action and
damages that could be asserted by Executive against the Company regarding
Executive's employment with and termination from employment with the Company,
including, without limitation, all claims for wages, salary, commissions, draws,
incentive pay, bonuses, reasonable business expenses, vacation pay, stock and
stock options, severance pay, attorneys' fees, compensatory damages, exemplary
damages, or other compensation, benefits, costs or sums.
5. RELEASE, INDEMNITY AND COOPERATION:
----------------------------------
(a) Notwithstanding the provisions of Section 1542 of the Civil Code
of California, in exchange for the amounts described in Section 3, and other
good and valuable consideration, the receipt of which is hereby acknowledged,
the Executive and his/her representatives, agents, estate, heirs, successors and
assigns, absolutely and unconditionally hereby releases, remises, discharges,
indemnifies and holds harmless the Releasees (defined to include the Company,
its predecessors, successors, parents, subsidiaries, divisions, affiliates,
assigns, and its and their current and former directors, trustees, shareholders,
officers, Executives, representatives, attorneys and/or agents, all both
individually and in their official capacities), from any and all actions or
causes of action, suits, claims, complaints, contracts, liabilities, agreements,
promises, contracts, torts, debts, damages, controversies, judgments, rights and
demands, whether existing or contingent, known or unknown, suspected or
unsuspected, including without limitation any claims incidental to or arising
out of his/her employment with, change in employment status with and/or
termination of employment from the Company. This release is intended by the
Executive to be all encompassing and to act as a full and total release of any
claims he/she may have or have had against the Releasees, whether specifically
enumerated herein or not, that exist or ever have existed from the beginning of
the Executives association with the Company (including any entities which the
Company acquired and/or merged with)up to and including the date of this
Agreement, including, but not limited to, any claims arising from any federal,
state or local law, regulation or constitution dealing with either employment,
employment discrimination and/or employment benefits such as those laws or
regulations concerning discrimination on the basis of race, color, creed,
religion, age, sex, sex
3
harassment, sexual orientation, marital status, national origin, ancestry,
handicap, mental or physical disability, medical condition, veteran status or
any military service or application for military service; any contract, whether
oral or written, express or implied; any tort; any claim for equity or other
benefits; or any other statutory or common law claim.
(b) The Executive acknowledges that his/her intention in executing this
Agreement is that this Agreement shall be effective as a bar to each and every
claim specified in Sections 4, 5 and 6 of this Agreement. In furtherance of
this intention, he/she hereby expressly waives any and all rights and benefits
conferred upon him/her by the provisions of Section 1542 of the California Civil
Code and expressly consent that this Agreement shall be given full force and
effect according to each and all of its express terms and provisions, including
as well, those related to unknown and/or unsuspected claims, if any, as well as
those relating to any other claims specified in Sections 4, 5 and 6 of this
Agreement. Section 1542 provides as follows:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT
KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE
RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS
SETTLEMENT WITH THE DEBTOR."
The Executive further represents that he/she understands and acknowledges
the significance and consequence of such release as well as the specific waiver
of Section 1542.
(c) Notwithstanding the foregoing, the Company agrees and hereby
acknowledges that the Release in this Section 5 is not intended to and does not
release the Company of any obligation it may have, pursuant to the Company's
Bylaws or as mandated by statute to indemnify the Executive against all costs,
charges and expenses, including any amount paid to settle an action or satisfy a
judgment reasonably incurred by the Executive in respect of any civil, criminal
or administrative action and/or proceeding brought against the Executive by
reason of his having been an officer of the Company provided the Executive (i)
acted honestly and in good faith with a view towards the best interest of the
Company; and (ii) had reasonable grounds for believing that his conduct was
lawful.
(d) In consideration of Section 5(c) above, the Executive agrees, upon
the written request of the Company and at the Company's cost and expense, to
cooperate with and provide all reasonable assistance to the Company, with
respect to any civil, criminal or administrative investigations, actions and/or
proceedings involving the Company and relating in any way to Executive's jobs
and responsibilities while at the Company or to any matters which the Executive
handled, participated in or had knowledge of while employed by the Company,
including but not limited to the Electro Scientific Industries, Inc. vs. Dynamic
-----------------------------------------------
Details, Inc. and GSI Lumonics, Inc. case (No. SACV00-272 AHS ) currently
------------------------------------
pending in the U.S. District Court (Southern Division of the Central District
of California).
6. WAIVER OF RIGHTS AND CLAIMS UNDER THE AGE DISCRIMINATION AND EMPLOYMENT
-----------------------------------------------------------------------
ACT OF 1967: Since the Executive is 40 years of age or older, Executive has
-----------
been informed that
4
the Executive has or might have specific rights and/or claims under the Age
Discrimination in Employment Act of 1967 ("ADEA") and the Executive agrees that:
(a) In consideration of extended exercise period for the Executive's
stock options as provided in Section 2(e) above and in consideration of the
amounts described in Section 3 hereof, which is in addition to anything of value
to which Executive already may be entitled, Executive specifically waives such
rights and/or claims to the extent that such rights and/or claims arose prior to
or on the date this Agreement was executed;
(b) Executive understands that rights or claims under the ADEA which may
arise after the date this Agreement is executed are not waived by Executive;
(c) Executive hereby is and was advised of his/her right to consult with
his/her counsel of choice prior to executing this Agreement and Executive
acknowledges that he/she has not been subject to any undue or improper influence
interfering with the exercise of Executive's free will in executing this
Agreement;
(d) Executive has carefully read and fully understands all of the
provisions of this Agreement, and Executive knowingly and voluntarily agrees to
all of the terms set forth in this Agreement;
(e) In entering into this Agreement Executive is not relying on any
representation, promise or inducement made by the Company or its attorneys with
the exception of those promises described in this document; and
(f) Executive understands that he/she has twenty-one (21) days to review
this Agreement prior to signing it and that the consideration stated in Sections
2(e) and 3 shall not be provided unless and until the Executive voluntarily
decides to sign this Agreement and does not revoke the Agreement within the
seven (7) day period described in Section 13 below.
7. PERIOD FOR REVIEW AND CONSIDERATION OF AGREEMENT:
------------------------------------------------
(a) When the Company presented Executive with this Agreement on August 1,
2001, Executive was informed that he has at least twenty-one (21) days to review
this Agreement and consider its terms before signing it.
(b) The twenty-one (21) day review period will not be affected or
extended by any revisions, whether material or immaterial, that might be made to
this Agreement.
8. PROPRIETARY AND COMPANY MATERIALS:
---------------------------------
(a) Executive expressly acknowledges and agrees that Executive's
obligations and the Company's rights under any Non-Disclosure, Confidentiality,
Non-Competition, Invention Disclosure and Development Agreement signed between
the Executive and the Company shall remain in full force and effect and survive
the termination of Executive's employment with the Company.
5
(b) On or within seven (7) days after the Termination Date, Executive
will return to the Company all proprietary and Company property and materials,
including but not limited to, personal computers, laptops, fax machines,
scanners, copiers, diskettes, intangible information stored on diskettes,
software programs and data compiled with the use of those programs, software
passwords or codes, tangible copies of trade secrets and confidential
information, cellular phones, credit cards, telephone charge cards, manuals,
building keys and passes, courtesy parking passes, names and addresses of all
Company customers and potential customers, customer lists, customer contacts,
sales information, memoranda, sales brochures, business or marketing plans,
reports, projections, and any and all other information or property previously
or currently held or used by Executive that is or was related to Executive's
employment with the Company. Executive agrees that in the event that Executive
discovers any other Company or proprietary materials in Executive's possession
after the Termination Date, Executive will immediately return such materials to
the Company.
9. NON-DISPARAGEMENT AND CONFIDENTIALITY: Executive agrees not to make
--------------------------------------
any negative, adverse or otherwise detrimental remarks concerning the Company
and including the Executives, officers, directors, shareholders, business,
operations, technologies, products, services, marketing strategies, pricing
policies, management, affairs and financial condition of the Company. Executive
agrees that he/she shall not divulge or publish, directly or indirectly, any
information whatsoever regarding the substance, terms or existence of this
Agreement and/or any discussions relating to this Agreement, to any person or
organization other than Executive's attorneys, accountants, financial advisors
or members of Executive's immediate family. Nothing herein shall prohibit or
bar Executive from providing truthful testimony in any legal proceeding or in
communicating with any governmental agency or representative or from making any
truthful disclosure required, authorized or permitted under law; provided
however, that in providing such testimony or making such disclosures or
communications, Executive will use his best efforts to ensure that this Section
is complied with to the maximum extent possible.
10. NON-SOLICITATION AND NON-COMPETE: To the extent the same is legally
---------------------------------
enforceable, the Executive agrees that during the Executive's employment with
the Company and for the period that the Executive receives salary continuation
pursuant to Section 3(a), the Executive shall:
(a) refrain from, directly or indirectly:
(i) hiring any employees, of the Company, its subsidiaries and affiliates,
to work for a competitor of the Company;
(ii) soliciting, enticing or encouraging any employees of the Company, it
subsidiaries and affiliates to resign or otherwise leave their
employment with the Company, its subsidiaries or affiliates; and
(ii) soliciting, enticing or encouraging any customers of the Company, its
subsidiaries and affiliates to discontinue their business relationship
with the Company, its subsidiaries and affiliates and/or to enter into
a business relationship with a competitor of the Company, its
subsidiaries and affiliates.
6
(b) not accept employment with or provide consulting services to a competitor
of the Company, its subsidiaries and affiliates or to otherwise start a
business or perform self employment activities which compete with the
Company's (including any subsidiary or affiliate) business.
In the event this provision is held invalid, void or voidable as against public
policy or otherwise, the invalidity shall have no impact on the other
provisions of the Agreement, which shall remain in full force and effect,
notwithstanding the invalidity of this Section 10.
11. BREACH OF AGREEMENT: Executive agrees that if Executive breaches any
-------------------
of the promises set forth in this Agreement or if Executive challenges the
general release of claims set forth in Sections 4, 5, or 6 of this Agreement,
the Company shall have the right to terminate the benefits payable or provided
to Executive under this Agreement, in addition to seeking all remedies available
to the Company at law and in equity for such breach, including but not limited
to repayment of all monies provided to Executive under this Agreement.
12. REPRESENTATIONS AND GOVERNING LAW:
---------------------------------
(a) This Agreement sets forth the complete and sole agreement between
the parties and supersedes any and all other agreements, understandings and/or
representations between or by the parties, whether oral or written, including
specifically the Termination Letter Agreement between the Executive and
Lumonics, Inc. dated April 13, 1998; provided, however, that, except as
expressly set out below in this Section 12(a), nothing in this Agreement will
affect, modify, or supersede the following agreements, which shall remain in
full force and effect in accordance with their respective terms and with the
understanding that the Executive's employment with the Company was terminated on
September 28, 2001:
(i) All Non-Disclosure, Confidentiality, Non-Competition, Invention
Disclosure and Development Agreements entered into between the Executive and the
Company;
(ii) All Stock Option Agreements entered into between the Executive and
the Company, except that the exercise period shall be extended, for the
Executive's benefit in accordance with Section 2(e) above.
(b) This Agreement shall deemed to be made and entered into in the
Commonwealth of Massachusetts and shall in all respects be interpreted, enforced
and governed under the internal and domestic laws of Massachusetts without
giving effect to the principles of conflicts of law thereof.
(c) This Agreement may not be changed, amended, modified, altered or
rescinded except upon the express written consent of both the Company and
Executive. If any provision of this Agreement, or part thereof, is held
invalid, void or voidable as against public policy or otherwise, the invalidity
shall not affect other provisions, or parts thereof, which may be given effect
without the invalid provision or part. To this extent, the provisions, and
parts thereof, of
7
this Agreement are declared to be severable. Any waiver of any provision of this
Agreement shall not constitute a waiver of any other provision of this Agreement
unless expressly so indicated otherwise.
(d) Executive may not assign any of his/her rights or delegate any of
his/her duties under this Agreement. The rights and obligations of the Company
under this Agreement shall inure to the benefit of the Company's successors and
assigns.
13. EFFECTIVE DATE: After signing this Agreement, Executive may revoke it
---------------
for a period of seven (7) days following said signing. This Agreement shall not
become effective or enforceable until the revocation period has expired.
EXECUTIVE REPRESENTS THAT HE HAS READ THIS AGREEMENT, THAT HE FULLY
UNDERSTANDS THE TERMS AND CONDITIONS OF SUCH AGREEMENT AND THAT HE IS
VOLUNTARILY EXECUTING THE SAME. IN ENTERING INTO THIS AGREEMENT, EXECUTIVE DOES
NOT RELY ON ANY REPRESENTATION, PROMISE OR INDUCEMENT MADE BY THE RELEASEES OR
ITS ATTORNEYS WITH THE EXCEPTION OF THE CONSIDERATION DESCRIBED IN THIS
DOCUMENT.
Executed this _______ day of ____________ 2001.
________________________________ ________________________________
SIGNATURE OF EXECUTIVE GSI LUMONICS, INC.
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
By: ______________________________
Title: ______________________________
STATE OF _______________________
COUNTY OF _________________ Date:________________________
On this _______ day of _____________, 2001, ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, did appear
before me with evidence of the same, and signed the foregoing Separation
Agreement and General Release as his free act and deed.
___________________________________
Notary Public
Name:
8
Commission Expiration Date:
COMMONWEALTH OF MASSACHUSETTS
COUNTY OF MIDDLESEX, SS. Date:________________________
On this _______ day of _____________, 2001, ______________________, the
_________________________________ of GSI Lumonics, Inc. did appear before me
with evidence of the same and signed the foregoing Separation Agreement and
General Release on behalf of GSI Lumonics, Inc. as his/her free act and deed.
____________________________________
Notary Public
Name:
Commission Expiration Date:
9
